Michaels, NextEra Partners IPOs Get Different Responses

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Arts and craft retailer Michaels Companies Inc. (NASDAQ: MIK) has sold 27.8 million shares in its initial public offering (IPO). The shares priced on Thursday at $17, the low end of the expected range of $17 to $19. The stock opened at $16.82 Friday morning, about 1% below the IPO price.

The company raised around $472 million in the IPO for Bain Capital Partners and Blackstone Group L.P. (NYSE: BX), which combined to take Michaels private in 2006 for about $6 billion. Prior to the IPO, Bain and Blackstone owned about 93.2% of Michaels and Highfields Capital Management owned about 6.2%. Both Bain and Blackstone retain a 40% stake in the company.

The company owns 1,263 stores under the Michaels and Aaron Brothers brands and generated about $4.6 billion in sales in its most recent fiscal year ended February 1, 2014. The company posted a net profit of $243 million last year.

Shares rose to a high $17.14 before retreating to around $17.02.

In a second major IPO Friday, alternative energy company NextEra Energy Partners L.P. (NYSE: NEP) began trading Friday morning at $32.55 per common unit, up 30% over the IPO price of $25 per common unit set Thursday night. The company sold 16.3 million units, well above the $19 to $21 expected range, and investors were happy to pay the premium. The company was spun out of NextEra Energy Inc. (NYSE: NEE).

Although NextEra Energy Partners may be treated like a master limited partnership (MLP) at the state level, at the federal level it is a corporation and will be taxed like a corporation until Congress changes the MLP laws to allow the inclusion of alternative energy companies.

NextEra Energy Partners common units rose to $33.20 shortly after trading began, but pulled back to about $31.34.

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